Thanks to Ian Wigman for this gem from
WIRED magazine. A man in Switzerland was recently fined a record $290,000 for driving 85 mph in a 50 mph limit. (It was less before he pleaded his case!) The reason being in 2002 the Swiss replaced prison sentences for some offenses, with fines based
on income. The driver in question has a reputed income of $820,000 and so in the end they took 35% of it as the penalty.
In a recent article in the
Guardian they reported on the £5.6m fine issued to RBS but also included the top 10 fines dished out by the FSA since February 2010, totalling nearly £55m.
This got me thinking, what if Banking Regulators decided to apply the same logic and percentages as the Swiss courts?!
I haven't done the maths but I am sure the fines would have totalled a hell of a lot more than £55m.
Just looking generally at fines metered out in recent times and not just by the FSA, a good number seem to be a result of:
* internal processes not being transparent
* failure to follow published regulations
* inadequate controls to monitor compliance to same
* poorly defined accountability
Can you see the cause and effect here? That's a theme Ian will be presenting about in London (22-23 Sept) and Houston (19-20 October) at "Inspiring Performance"
conferences. As Ian will be making clear; it's a lot easier for companies to comply with the basic "rules of the road" if they obtain business process transparency first.
To round-off the driving analogy - the alternative might be compared to rush hour commuting with your windscreen misted-up - quite scary and potentially fatal.
With the FSA being "wound-up" in the not too distant future, we might presume that they want to go out on a high. There has been talk of linking fines to company income. Let's hope they don't ask the Swiss police for advice.
reading the original Swiss article, as I suspected the amounts were in Swiss Francs not US Dollars - I think the Wired correspondent just couldn't cope with doing a currency conversion.
© Finextra Research 2014